Comeback of the Wisconsin dairy business

2132323232_09a7a22cbb_oEd Jesse, Professor Emeritus
Department of Agricultural and Applied Economics
UW-Madison College of Agricultural and Life Sciences
evjesse@wisc.edu
Phone (608) 262-6348

Ed Jesse talks about the promising future of the Wisconsin dairy business

Second of a series in concert with the 2013-14 Wisconsin Agricultural Outlook Forum Jan.22 and the release of the annual Status of Wisconsin Agriculture publication.

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3:00 – Total Time

0:22 – 2004 hits bottom
0:58 – Dairy initiatives begin
1:34 – Dramatic improvements
2:31 – Future opportunities
2:48 – Lead out

Ed Jesse Wisconsin dairy comeback

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Transcript

Sevie Kenyon: Ed I understand our dairy business here in Wisconsin went through a real down phase. Can you describe that situation?

Ed Jesse: We peaked out in milk production around 1988 at about 25 billion pounds. In over the next sixteen years we were sliding down slowly. We ended up in 2004 at about 22 billion pounds. We lost 3 billion pounds of milk, there was concern in the industry that we could be weakening the industry substantially. And a lot of efforts, dating way back to the mid-80’s, tried to start initiatives that would bring the industry back to its previous levels or beyond.

Sevie Kenyon: What things were tried to bring the industry back around?

Ed Jesse: The state has several initiatives including tax breaks, use value assessment, including tax deductions for investments by both farmers and plants. The university had various efforts going on to try and modernize a dairy industry. We had two new dairy organizations formed. PDPW, the Professional Dairy Producers of Wisconsin, and Dairy Business Associates—DBA, and I think all of these tend to change the climate as well as attitude of the dairy farmers in the state.

Sevie Kenyon: And Ed, what kind of improvements have we seen since these initiatives began?

Ed Jesse: Well things turned around very abruptly starting in 2005. Again in 2004 we were at about 22 billion pounds of milk, in 2013 we’ll be very close to 28 billion pounds of milk. We’ve been increasing milk production at the rate of about 600 million pounds a year, which is a phenomenal rate of increase. It’s come about through a number of sources, perhaps the most important one is that we’ve seen an enlargement of dairy farms, modernization, more milk being produced per farm, but at the same time we’re seeing a lot of strength in the smaller dairy operations. We’re not losing dairy farms nearly as rapidly as we did in the 1980’s and the 1990’s. There smaller operations have found ways to remain profitable through grazing for example for organic dairying, through value added kinds of products tied to grazing.

Sevie Kenyon: Ed look into your crystal ball here. Where does this continue to go?

Ed Jesse: There’s a lot of opportunities, a major one is our specialty cheese business, which gives credibility and value to all of our cheese production. But at the same time we have challenges. Perhaps the biggest one is water, and I’m talking about quantity as well as quality.

Sevie Kenyon: We’ve been visiting with Ed Jesse, Department of Agricultural and Applied Economics, University of Wisconsin and the College of Agricultural and Life Sciences, now celebrating 125 years, and I am Sevie Kenyon.

 

 

 

 

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